The Convergence of CRM, Database

Five or six years ago, when customer relationship management became the buzzword du jour in marketing, it seemed that the collection of disciplines that make up the practice of database marketing was old news.

The tried-and-true methods of identifying and reaching customers and prospects in a database who could and would buy what we wanted to sell seemed buried by the explosion of exotic new technologies that had been created to drive CRM initiatives.

Sometimes I think marketers are like crows. We're attracted to shiny objects. We chase the latest, greatest idea only to discover later that we've taken a left turn and wound up in the swamp.

People! Let's keep our eye on the ball, shall we? CRM is a good thing, it's important and in most situations it's even an imperative. But it's not something you do instead of database marketing; it's something you do at the same time. Consider these facts:

· In almost all situations, CRM presupposes that the dialogue you are engaged in was initiated by your customer. The customer acts and you respond, trying to turn the dialogue into a relationship-building (and selling) opportunity. There's nothing wrong with that. It's smart, it's usually the right thing to do, but it's an entirely reactive process.

· I know of no one who can afford to sit idly and wait for customers to initiate selling opportunities. It doesn't happen often enough to drive growth. At its heart, marketing is a proactive exercise.

It is the integration of proactive database marketing with reactive CRM that makes the one-to-one connection rewarding for both of you. Your customers respond to an offer when you make it, and you respond to their needs when they ask. When the two converge, the result is a holistic, shared experience that completes the marketing cycle.

Here are two real-life examples of smart DBM/CRM convergence:

Every time I log onto the Amazon.com home page to see what is new in my favorite genre, science fiction, it reads a cookie on my hard drive, identifies me and connects me to a back-end database that contains my likes and dislikes, then populates the page with new science fiction books I might be interested in reading. Terrific customer relationship management, executed in the best one-to-one tradition.

Recently, I received an e-mail from Amazon letting me know that Don Novello (you probably remember him as Father Guido Sarducci) had written a new book in the "Lazlo Letters" series. This e-mail was triggered because I had bought the two previous books in the series several years ago. This is classic database marketing, seeking small, highly targeted segments in a database with a known propensity to buy a specific product, then proactively making the offer.

That's why I think of Amazon as the best bookstore I've never been in.

In 2003, I had the honor of being a judge for the NCDM Database Excellence Awards. The first-place winner was National Australia Bank Ltd. for its National Leads program. This capability is at the heart of National Australia Bank's CRM and represents the culmination of 15 years of focus on customer needs. It identifies and generates leads for the bank's relationship managers in two ways:

· The system proactively determines an individual customer's need for service attention, propensity to buy or respond to offers for specific products, and potential to defect.

· Reactively, National Leads identifies changes or events in the customer's relationships, such as balance changes, large transactions and renewals.

In both cases this critical, time-sensitive information is fed to the bank's relationship managers each morning for personalized, relevant and timely customer contact. It is a perfect example of CRM and database marketing working hand-in-hand, and it has generated billions of dollars in new asset and liability balances for the bank.

Success in the marketplace is not a matter of choosing whether to be a relationship marketer or a database marketer. In almost all situations, how well your overall marketing works is largely a function of how well you fit the two together.